It's still confusing.
I still don't understand why you're getting Windows 2000 error, if Windows ME was installed.
Also, the latest error indicates, that your hard drive is formatted with NTFS (Windows NT, 2000, XP, Vista), not FAT (Windows ME, 98, and earlier).
If you really want to install ME, you'll have to format hard drive, but...
1. I'd rethink the whole project. Windows ME is not good OS.
2. I'm ready for bed, so either someone else will chime in, or we'll continue tomorrow.
In any case, don't rush anything.